Posted
by
Soulskillon Monday March 07, 2011 @02:47PM
from the hmm-how-can-we-blame-the-terrists-for-that dept.

langelgjm writes "The Social Science Research Council, an independent, non-profit organization, today released a major report on music, film and software piracy in developing economies. It's a product of three years of work, and the authors conclude that piracy is primarily driven by excessively high prices and that anti-piracy education and enforcement efforts have failed. Still, chief editor Joe Karaganis believes that businesses can survive in these high piracy environments. The report is free to readers in low-income countries, but behind a paywall for certain high-income countries, although the SSRC notes, 'For those who must have it for free anyway, you probably know where to look.'"

The average person in Cambodia earns one dollar a day. Some kids collect scrape metal and if they collect $0.25 worth of them, they can go to school the next day (they are not only happy about it, but work to get to school!). Do you really think they're going to spend it on entertainment than costs more than they make in a month?

I was visiting there last year and unsurprisingly they did have stores with pirated goods. The largest mall in Phnom Penh has full floor of tv shows, movies, games, applications, everything you can think of. Games and movies cost $1-2 while all seasons of The Simpsons cost $10, all neatly packed and everything. The other series with less dvd's cost even less of course, and this was inside a big mall and they probably added some extra to the price since I was foreigner (they didn't list prices but you had to ask). Maybe you can get them even cheaper from street vendors.

And while speaking of Cambodia, it's quite nice place to visit, not your usual holiday place. Even in the cities some of the streets are just sand and when you go out all the tuk tuk drivers come asking you where you want to go. If you want to go for a few beers and a pizza, the driver takes you there and waits for you while you do your stuff and drink beer, even if it takes long time. Then you just give them like $5 for being your driver the whole night, and they're happy since they're still getting a lot more than people usually. That's why there isn't any shortage of tuk tuk drivers either. And yeah, girl bars (or ladyboy bars if you prefer that) are open 24/7 and there's happy pizzas with special ingredient;-)

In addition to it, these developing countries try to protect their local market and charge additional taxes for imports at their customs.

This list [wikipedia.org] shows United States nearly at the high end of the minimum wages list, consequently its citizens have higher acquisition capacity than any other in developing countries, yet prices come not only the same but sometimes higher to those countries. A simple wii game for example (although not first need) comes at US$100 (or higher) in certain countries where minimum

Having discount prices for 3rd-world countries can create a double standard when it comes to labor outsourcing. We have to compete with 3rd-world labor at their labor rates, not ours, yet they want discounts on software. You can't have it both ways, otherwise we are giving our jobs away as a charity.

If they have local adjustments for prices, then we should get local adjustments on wages because our housing and medical costs are far higher than theirs.

What the fuck are you talking about. They (the "third world") get paid by their local standards, and thus can't afford to drop 60 bucks for an xbox game worth a few hours of entertainment. Your post makes no sense at all.

DVD region codes were meant to keep you from watching a movie that was unreleased in your territory (OH NOES!), not to charge poor people less.

Ahhh, no. If they reduce prices to sell into third world countries, people there would take the product and undercut the owners in other markets. Thusly, they create DVD regions to allow them to sell into other markets (regions) with price controls without being their own worst competition in other regions. It has a side benefit of also allowing to the very coarsely control distribution regions but first and foremost, its intended to allow them to control market distribution, and with it, regional prices.

DVD region codes were meant to keep you from watching a movie that was unreleased in your territory (OH NOES!), not to charge poor people less.

Heck, it was one of the nails in the HD-DVD coffin during the HD-DVD/Blu-Ray battle. Theatres in other countries were suddenly finding less customers because it was cheaper and better to just import the HD-DVD that go to the theatre, OR the movie wasn't out in theatres yet!

So yes, there was that effect. Sony came out ablazing with "We haz region codes!" and thus ende

DVD region codes were meant to keep you from watching a movie that was unreleased in your territory (OH NOES!), not to charge poor people less.

Hahahaha, they're making tons of money on it and you think they didn't think of that little side effect? Look up "price discrimination", segmenting your market then charging different prices is a sure-fire way to increase profits. Instead of charging everybody one price that's either very expensive or very cheap they gouge each market. And yes, I got plenty examples of that just between the US and Europe without getting into the third world thing at all.

You're completely wrong
Why would I bother selling something in a 3rd world country if my 1st world profits have to subside it? I'm better off getting the profits from the 1st world and just letting the 3rd world pirate.

I don't think GP meant selling at a loss in First World. What he meant is that First World expensive sales provide the bulk of the profit. If you sell at the same low price everywhere, then sure, you'll get more Third World sales, but you'll get significantly less from US/Europe - enough so that you might end up in red. You probably can find a middle price such that the profit remains the same as it is now with multiple-tiered pricing model, but most profit at that price would still come from developed coun

The whole reason they can "afford" to sell it cheaply in the third world countries is because it is being subsidized by the high prices in the higher income locations.

So explain to me why when the Australian dollar is equal or greater than the US dollar, Australian's are still being charged more for everything? For example, a digital download of Office 2010 Home and Business is $279 for US customers and $379 for Australian customers. I could give you countless examples of this.

And, for added bonus points I can use a US proxy site to purchase it online and save $100!

The average person in Cambodia earns one dollar a day. Some kids collect scrape metal and if they collect $0.25 worth of them, they can go to school the next day (they are not only happy about it, but work to get to school!). Do you really think they're going to spend it on entertainment than costs more than they make in a month?

It's true that prices have to be adjusted to the local economy. And, that does raise some problems when you're selling for cheap in third-world countries, since it creates an in

Obviously one doesn't for products with high margin cost of production. You can't just start selling LCD TVs for $20 because that's how much Chinese peasants could afford to spend. But for the stuff we're talking about here -- games, movies, music -- it's definitely possible, because the price of producing one more copy of a game is so low. As the pirates are demonstrating, you can go very very low here.

I think the reason that the content companies don't do that is either lazyness, unwillingness to look lik

NO SHIT? Someone has been reading my posts on slashdot? THIS is what I've been saying for YEARS, good God! Just look at my rant posts, I must have said that about 5 times at least.

I'm NOT paying half my monthly salary for a PS3 or XBOX game. Same way as I'm not paying $10-$20 for a movie ticket. That's why movie tickets in my country cost $3-$5 and people go to the movies, while very few don't pirate games. Charge me something I can pay, and I gladly will. Be a jerk and try to charge me twice or 4x as much as the US price and I won't buy it (PS3/XBOX 360 cost USD 800 here. Taxes are not the reason). For me a $100 game is like expecting the average american to pay $500 for a PS3 game. Ain't gonna happen.

In the city where I grew up here in the US, you can still see movies in a mainstream theater for like $5 at night and $3-$4 for a matinee. It sounds like you are getting ripped off for your movies, as well.

Yeah, also if you send the ticket to the INCAA (national cinema institute) you can win $10.000 every month.

Anyway, cinema is the only "cheap" thing. An xbox 360/PS3 is $800. 3mbps ADSL connection, $30 a month. Anything electronic or high tech, USA price multiplied by 3 or 4 (they blame it on taxes, while tax is "only" 50%).

A Big Mac combo is about $8 (McDonald's is not for the average folk) -- for that money I can go to a local restaurant and have a steak, on a table, with a waiter serving me.

Count yourself lucky - the "cheap theaters" have been ruthlessly squeezed out of my town over the years - I think the cheapest I can get into a movie now is $5, and that's if I drive out of town to the place they reno'ed from an old supermarket.

Of course, it doesn't help that the average home theater systems are more than sufficient for all but the latest special effects blockbuster.

The "cheap theatre" here has shows for $5, but they only get movies about the same time they appear on DVD, additionally the theatre is pretty much falling apart, you have to pick your seat carefully, and many of their screens have tears in them...

To go to a real theatre and see first run shows, the price is $12-$15...

Dont' feel bad, even the us prices are fucking outrageous. No video game is worth more than $20, absolute ceiling, even with inflation. Plenty of publishers have been very successful doing this because everyone buys their games. It's just old dumbass publishers who charge high and expect people to pay it.

You don't even need to look at different countries as a sample study. I grew up in Pittsburgh, Pennsylvania where movies were 7 USD and you could choose any seat you wanted in the theatre since that few of people went. I moved to an affluent suburb of Washington DC where the cost of living was 30% higher and the average family income was 300% higher and the movies were consistently packed. I'd also throw in a tidbit about quality of the movie theatres too - the ones in DC were nice because they made enou

This is so true. In Utah we used to have a wide variety of local theaters. They slowly closed as the megapexes came in. But you know what, I like a nice clean megaplex with nice seats. I refuse to go to some run down shit hole. Brewvies is the only exception here and that's because they serve beer. So yeah tickets cost 7.75 but it's worth it for some quality and cleanliness.

I was wondering about that myself - big reason why I snagged a (free) copy was to see if they explain why.
Of course, I'll probably see it used as "proof" that Canada is a haven for piracy or some such nonsense next week...

Depending on where you live in Canada, yes we are actually low-income especially when you figure that between 30-52% of your wages are gone in taxes. On the EC this is very apparent especially with the lack of any solid industry of any kind. In Ontario/Quebec it's hit or miss. Out west less so, but the cost of goods is unbelievably high(whooo $4/loaf of bread, $9-15 for a gallon of milk). You're looking at somewhere between 42k and 52k as the median wage. And 25% of our population lives at or below th

US$8 for non-commercial use in high-income countries—a list that for the present purposes includes the USA, Western Europe, Japan, Australia, Israel, Singapore, and several of the Persian Gulf States (Kuwait, Qatar, the United Arab Emirates, Brunei, and Bahrain), but not Canada.

Per-capita income is only one side of the coin, what about per-capita expenses?

Our dollar is worth more than the US Dollar, but when every product costs significantly more than it does in the US, it doesn't make us feel "rich"... (not to mention the significantly higher taxes we pay)

In developing countries the average cost of life is lower, but the average income is much lower. Where I live, Windows plus Office costs 2-3 average salaries. How can they seriously expect anyone to pay? Even those who can afford it find it morally unacceptable to waste so much money on software. You can get it for free and donate the money.

That's not true. I have a comic book shop. My customers usually read the comic (mostly japanese manga) online and several months later, when it's finally released here, they buy it. And they're not exactly cheap either!

Wrong. The price of free is too often beat by the prices of "I am used to this" and "I am afraid to learn new stuff". That's why people who would be perfectly served by Free software cling to Windows and MS-Office nonetheless.

They needed three years to reach this conclusion? The purchasing power parity of the dollar to the rupee is about 10:1. Meaning 10 rupees in India is around 1 USD in terms of what one can buy with it. If you charge me the same USD value (multiply by 45) in India, you're bloody insane if you think I'm going to shell out that much!

I remember seeing a store selling a copy of Windows Vista for Rs. 14,000. That's like asking the average american to pay $1,400. Any takers? Didn't think so.

To be fair, the report has much more than just the info about prices... I just had to condense something down for the summary. There's also a lot of information about the effectiveness (or lack thereof) of the various IP and anti-piracy "education" (propaganda) attempts, empirical data on the failure of enforcement activities to make any dent in piracy, and findings about what does in fact drive prices down to more affordable levels (competition from domestic creative industries). There are six detailed cou

Valve discovered that if they release more translations of a game on the day of release instead of delaying for a few months, piracy drops and legit purchases go up. Turns out game crackers translate the games too.

Valve discovered that if they release more translations of a game on the day of release instead of delaying for a few months, piracy drops and legit purchases go up. Turns out game crackers translate the games too.

In certain countries (Thailand comes to mind) it is common for local movies to be released on DVD without English subtitles to "protect" the local studio's ability to license the movie for foreign distribution. Unfortunately the net result seems to be that a lot of interesting movies never get an english-friendly release. So some people have taken to doing the subtitles themselves (sort of like anime subbers but without all the drama).

The point is to generate high piracy rates, in order to generate the PR necessary to give pet legislators an excuse to do their "friends" a favor by passing yet more draconian legislation, allowing heavier and heavier locks, they hope defeating fair-use activities such as time shifting, format shifting and unlicensed commentary.

The organizations crying over the exploding piracy figures know full well the real score.

The point is to generate high piracy rates, in order to generate the PR necessary to give pet legislators an excuse to do their "friends" a favor by passing yet more draconian legislation, allowing heavier and heavier locks, they hope defeating fair-use activities such as time shifting, format shifting and unlicensed commentary.

1. We've already established that "heavier locks" don't really work when you have to give the end user the key2. High piracy rates generate a culture of piracy that has shown itself to be nearly impossible to break

All the legislation in the Western World won't do anything to kill piracy in regions like Eastern Europe, Asian, and Africa.

'For those who must have it for free anyway, you probably know where to look.'"

Piracy doesn't get you something for free. Piracy is when someone makes unauthorized duplicates of something which they don't own the copyright for with the intention of selling it for a profit. Piracy is the guy on the street in New York who is trying to sell you a movie that is still in the theaters for $20 on DVD or is trying to sell you a copy of some software for $5.

Stop perpetuating the misuse of these words. Piracy, copyright infringement, plagiarism, and forgery are all different things. Playing a scene-ripped copy of a game or movie is not piracy. That doesn't justify it if you do it, but it's not piracy.

Piracy is when a syphilitic sailor plunders legitimate commerce in a region of the sea, terrorizing and looting ships, murdering their captains, and taking wenches and boys prisoner.

This stuff is white-collar IP infringement, and calling it piracy is just demonizing it to make political inroads into putting more public resources towards stopping what is, in most cases, barely a misdemeanor.

The artificial division of the world in DVD regions is also one major reason for piracy. Take for example North Africa: officially, it is in DVD region 5, but culturally AND economically, with all their ties to Europe, they get all their DVDs from Europe, a.k.a. region 2; legally or pirated, if need be. If the players you have there are all region 2 (and almost all of them are, because they're getting them from Europe), there's no point in buying a region 5 DVD there.

One of the truisms of the software industry I've always heard is that publishers promote and tolerate a certain baseline amount of software piracy to win mindshare and gain experienced users.

Is there any history of companies that manage to implement a very difficult to crack DRM (eg, dongles, etc) going under or fairing poorly? In other words, once the software becomes too difficult to pirate, the vendor ultimately loses legitimate sales -- hard to evaluate the product, difficult to find experienced users, etc?

I'm sure it's difficult to say "for sure, DRM made them go under" but it would be interesting to see if that kind of thing has happened.

Minimum wage: 50ish pesos a day for 8 hours, which is around 4usd.
Average income for a family: 7,000 pesos a month, which is 500usd. (Source: Inegi, in spanish)

Price for a new hollywood release for DVD: 200-300 pesos
Price for an old movie DVD: 100 - 150 pesos
Price for a new popular album: 150-250 pesos
Price for old albums: 100-150 pesos
Price for a New PC game: 600-800 pesos
Price for a New Console game: 800-1200 pesos

In the early 80s the Commie 64 was targeted for kids. After you convinced your parents to spend $300-$400 on what they considered a toy, you then had to convince them to spend another $50-$60 for a piece of software.The best way to describe the result was 'fat chance'.

Hacking/copying was the only way most kids could get ANYTHING for the 64. I admit I was heavily into this. Not so much the hacking as the copying and distributing. This was the time when hackers were seen as the Robin Hoods of the early home computer age. Of course this has changed and hackers are seen in a different light now but where they came from hasn't: corporations want way too much money for the product they produce.

In the late 90s I worked a contract for Electronic Arts. During that time I could buy software that was going for $90 in the stores for $10 from the internal EA store. I know some of the $90 price is retail markup but not all.

At least EA puts out software that works unlike the MS business model of double-gouging: pay thru the nose for crap software then do it again when the 'upgrade' (corrections & fixes) are released.

...the "no shit, Sherlock?" thread. If it seems blatantly obvious to the variegated crowd here on slashdot, you'd think maybe the **AA would consider firing their market research personnel. If you drop the price of your goods by 80% but sales go up by 400%, you're now making the same money but with a lot higher market penetration, right? Is my math wrong? (Likely wrong -- I attended Louisiana public schools.:P)

If you drop the price of your goods by 80% but sales go up by 400%, you're now making the same money but with a lot higher market penetration, right? Is my math wrong? (Likely wrong -- I attended Louisiana public schools.:P)

The problem is that because of income inequality in a lot of developing countries, it is often more profitable to sell to a small but wealthy portion of the population, rather than to drop the price to a level that expands affordability and access.

I just looked at the Major Findings, and they could quite easily have removed the term "Developing Economies" completely, and the report would still have made sense. I live in a developed country, and media is so expensive here that the media companies are complaining that sales of music (in particular) are on the decline, but there never seems to be any analysis of why.
Just coincidently, I had a conversation with a colleague about the troubles he has been having with music DVD's he buys from amazon.com of

The Berkman Center had a discussion (in Feb. 2010) with Joe Karaganis, Director of SSRC, to discuss the "findings from a forthcoming six-country study of media piracy..."

.

Q: What will be the take-away of the report?
A: It won’t be liked by industry lobbyists because it departs from the theft narrative that has defined the debate. It’s written from the perspective of the developing economies, where the reasons and conditions for piracy are just not part of the piracy of debate. You never hear a

I don't do piracy, if I don't want to pay the going price for something then I just don't buy it & don't copy/download it either - if the rest of the world did that then they'd have the music/movie/software companies would have no reason to employ DRM, the only thing they could do is reduce prices to sell more - basic economics. Otherwise, patronising lecture mode over...

With that said, I'm getting bored with the whole capitalism thing now anyway, it's dying as we speak and it needs a reboot.

This is the result of our economics clashing with a reality of information: a free-market economy (and through more hidden means all other kinds of economies) determines price based on a supply-demand curve. A supply-demand curve shows the number of willing purchasers and amount of supply at a given price, and is used to help determine the point on the curve where the most *profit* (not sales) can be made.

The problem is that information, or anything that can be entirely represented as information, has wh

Very well said. However, it's not just rich vs poor countries. We have richer and poorer people in the US, too. Also, information that may be worth thousands to me might be worth only dollars to you. That's why I like the fixed monthly/yearly fee concept. For example, Canadians could agree to pay an average of $50 more per year in income tax in order to fund the government to purchase all-you-can-eat rights to digital music. That would both compensate musicians more than they get now, while delivering

So who should pay? Obviously game developers can't live on $1 a game, so if games were $1 everywhere there would no longer be any multi-million dollar games like Starcraft II. How many billions would Microsoft lose if Windows and Office all sold for $1? Would anyone bother learning programming knowing that you can't make a living?

I am pretty sure that at least in some cases drug companies (not exactly the least greedy companies around) charge less for things like AIDS medications in developing countries than they do in the US.

More likely they lobby the government to pay some sort of compensation, and sue their way into keeping local labs or universities from making generics. They are certainly the most disgustingly greedy companies out there. Pay or die.

Yes, there is some price differentiation going on with pharmaceutical products and other IP-heavy goods... however, it's not as much as you might think. A large part of the problem has to do with high income inequality in many developing countries. This has the perverse effect of actually making it more profitable to sell to a tiny sliver of the wealthy elite, than to sell in large volumes at lower prices. For more on this, see Flynn, Sean, Aidan Hollis, and Mike Palmedo. “Economic Justification for O

It's particularly bad for medications which have little to know market in the developed world. Sometimes governments of poorer nations will threaten to dissolve the companies IP rights if they don't lower the cost. Sometimes it works, but often it doesn't because a lot of the time the companies don't have to be working on medications to solve those problems, there's poor profitability and they aren't under any sort of legal requirement to sell medications at a loss.

Just because something is free, doesn't mean that someone won't give you something for it. Ask any busker. The key is that it is not up to the artist/author/musician/actor to determine how much something is worth. It is up to the consumer.

because some people need to make money on what they built on things created from accumulated knowledge of mankind.

see, you take freely from public - anything - then put something on top of it, and then demand stuff from the public for your addition.

and suddenly, because you just added a small piece of crap COMPARED TO what you have built that on (start from fire and end it with electricity), you end up fulfilled your obligation to the public, and just and fair in your demands.

because some people need to make money on what they built on things created from accumulated knowledge of mankind.

see, you take freely from public - anything - then put something on top of it, and then demand stuff from the public for your addition.

and suddenly, because you just added a small piece of crap COMPARED TO what you have built that on (start from fire and end it with electricity), you end up fulfilled your obligation to the public, and just and fair in your demands.

see, you take freely from public - anything - then put something on top of it, and then demand stuff from the public for your addition.

I seem to remember the public charging me for my education, books I read gaining said other knowledge from, and even a percentage of any sales of my own "crap" I added on top of the "public's" knowledge. In fact, the public seems to be charging me for a lot of people's education. The only way you can believe there was a time when public knowledge was completely free with no trade-offs of even sex or membership duties owed to a hunter-gatherer tribe is if you believe it grew on a tree in the form of an appl

The ideal case is when everyone can freely download any digital content that's legal access (and here I just mean no kiddy-porn). Also, content creators should be rewarded based on the value of their work to consumers. Free markets fail here because digital content has different values to different people, and people have different amounts they can afford to spend.

I'm working with a few people on Ebooks.coop, which will be a co-op owned by it's members, for distributing digital content. I want to have an

Nope: [associatedcontent.com] "over 50% of apprehended adults were educated professionals and financially secure. " Adjustment disorder [minddisorders.com] "is a type of mental disorder resulting from maladaptive, or unhealthy, responses to stressful or psychologically distressing life events." Most of the people that steal don't do it because they can't afford it, it's the cheap thrill and excitement of breaking the law.

Why call it a con? We need MORE studies like this to refute the baldfaced lies of the BSA, RIAA and MPAA. Those clowns pull numbers out of their ass and everyone treats it like gospel. Some actual facts are a useful counter.

"Gee, Mr. Legislator, there's 25 studies all saying that piracy is caused by teenagers' disrespect for the law, and only three saying it's caused by stupid decisions by the publishers... You should really support that bill for tougher piracy penalties."

compared to

"Look, Mr. Lobbyist, there's thirty studies from different organizations saying it's the publishers' greed causing piracy, and only 25 studies, all done by organizations funded by the BSA, RIAA and MPAA. Copyright's a civil matter, and I'm not going to waste more money criminalizing it. Do your own dirty work."

Government corruption accusations aside, the same ideas apply to media and the public at large. More studies from independent organizations are necessary to counteract the farcical studies from the cartels' think tanks. Yeah, it's a waste of money, but it's part of the fight.

I can no longer think of a single reason to have Windows on any computer I build. And it's getting about time to build a new one (last one was balls-out enough that it's still a fast mover and slicker'n goose-shit over 3 years later, but cracks are starting to show in its compatibility, upgradeability, and reliability). I can't remember the last time I went to Excel instead of Google Docs.

By xmas I expect I'll have bolted up a new head, and I doubt this time I'll automatically choose Micro